The Invoice Market Launch Media

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1 The Invoice Market Launch Media BRW 16 September uzpgmtb6atqbbl The number of technology- enabled financing alternatives, such as Artesian- backed VentureCrowd, The Invoice Market and CoinJar, has doubled in Australia in the last two years. They could strengthen their toehold if recommendations to increase the capital requirements of the big four banks are adopted by the federal government. It s early days but the potential is there, said a spokeswoman for The Invoice Market, which entered the Australian market in June 2014 and has funded $10 million in invoices to date.

2 The Murray review of the banking system is concerned about the hefty exposure to home loans of the big four: Commonwealth, Westpac, NAB and ANZ. It s widely believed the review panel will recommend increasing the level of capital these institutions have to hand to cover home loans, to bring it more in line with the capital requirements of business lending, which is considered higher risk. Banks have arched up in response, saying it will impede their ability to lend to business. It s expected small enterprises will feel the brunt of any imposition most keenly. So far, new disruptive finance entrants provide a minuscule degree of funding in absolute terms. Society One, launched two years ago, has lent about $1.2 million; CoinJar claims to have transacted $40 million since it began last year, and the Australian Small Scale Offerings Board has raised $20 million since But Artesian managing partner Jeremy Colless said technology has severed the lock on the client base that traditional banks and investment houses once enjoyed and exploited. Watch this space and ignore it at your peril, Mr Colless said. As an example of where the market could head, The Invoice Market which is an ebay- style platform that allows invoice factoring is being used by the UK government to channel assistance to small and medium businesses. Rich families are alive to the opportunity, with the likes of the Smorgons upping their investment in niche finance provider QuickFee on the promise of 20 per cent returns.

3 AFR - 16 September ab12-66f56d6fe0f3 The number of technology- enabled financing alternatives, such as Artesian- backed VentureCrowd, The Invoice Market and CoinJar, has doubled in Australia in the last two years. They could strengthen their toehold if recommendations to increase the capital requirements of the big four banks are adopted by the federal government. It s early days but the potential is there, said a spokeswoman for The Invoice Market, which entered the Australian market in June 2014 and has funded $10 million in invoices to date. The Murray review of the banking system is concerned about the hefty exposure to home loans of the big four: Commonwealth, Westpac, NAB and ANZ. It s widely believed the review panel will recommend increasing the level of capital these institutions have to hand to cover home loans, to bring it more in line with the capital requirements of business lending, which is considered higher risk. Banks have arched up in response, saying it will impede their ability to lend to business.

4 It s expected small enterprises will feel the brunt of any imposition most keenly. So far, new disruptive finance entrants provide a minuscule degree of funding in absolute terms. Society One, launched two years ago, has lent about $1.2 million; CoinJar claims to have transacted $40 million since it began last year, and the Australian Small Scale Offerings Board has raised $20 million since But Artesian managing partner Jeremy Colless said technology has severed the lock on the client base that traditional banks and investment houses once enjoyed and exploited. Watch this space and ignore it at your peril, Mr Colless said. As an example of where the market could head, The Invoice Market which is an ebay- style platform that allows invoice factoring is being used by the UK government to channel assistance to small and medium businesses. Rich families are alive to the opportunity, with the likes of the Smorgons upping their investment in niche finance provider QuickFee on the promise of 20 per cent returns.

5 Broker News 16 September news/onerous- bank- terms- forcing- smes- to- find- alternative- finance aspx Australian SMEs are increasingly searching for alternative ways to finance their businesses, due to onerous and inflexible bank terms, according to new research. The report, published by The Invoice Market, revealed that two out of the three businesses surveyed said that a lack of finance was affecting their ability to grow. Tightening bank credit conditions and long payment terms are the main concerns for Aussie SME owners. Over half of the businesses surveyed (52%) are concerned that reforms to the banking sector are going to make it harder to get a loan, while almost three quarters (70%) said that very long payment terms were negatively affecting their cash flow. Angus Sedgwick, managing director or The Invoice Market says SMEs are now turning to alternative ways to finance growth, such as peer- to- peer and crowd- funded equity- raising. Just over 40% of the businesses in our survey said they d turn to traditional debtor finance, with its flexibility compared to bank finance being the key benefit, he said. But there are another 60% who wouldn t have access even to this type of factoring, due to requirements that their invoices be spread across a certain minimum number of clients or based on geographical limitations. These are good businesses, but their risk profile is just too high for the institutions. Agility and creativity are key to

6 servicing these businesses. Online models which connect businesses with investors are just one of the ways the issue is being addressed. Sedgwick says that tech- enabled finance alternatives available to Australians have doubled over the past two years, and is crucial for future innovation. The next boom in Australia could be driven by SMEs access to cash, he said. News Pronto 16 September business/ new- research- shows- aussie- smes- are- cautiously- embracing- disruptive- finance New research shows Aussie SMEs are cautiously embracing disruptive finance Recent research has found early signs that small to medium businesses are turning to disruptive solutions to solve common financing and cashflow problems. Long payment terms and difficulty accessing bank loans is driving their search for better forms of finance. Those who have not yet explored new models are feeling the credit squeeze, with 40% accessing funds through traditional forms of debtor finance and a worrying 32% saying they would be forced to use their personal savings or equity in the family

7 home, says the study Cash Flow Issues Drive Aussie SMEs to Disruptive Solutions published by The Invoice Market. The move to disruptive financing models is a clear vote against the onerous and inflexible terms banks and other types of financing levy on SMEs, says The Invoice Market Managing Director Angus Sedgwick, who commissioned the survey, The internet is creating efficient markets. This is an exciting time to be in business in Australia. Business finance can be expensive, inflexible and unsuitable Just over 40% of the businesses in our survey said they d turn to traditional debtor finance, with its flexibility compared to bank finance being the key benefit, says Sedgwick, But there are another 60% who wouldn t have access even to this type of factoring, due to requirements that their invoices be spread across a certain minimum number of clients or based on geographical limitations. These are good businesses, but their risk profile is just too high for the institutions. Agility and creativity is key to servicing these businesses. Online models which connect businesses with investors are just one of the ways the issue is being addressed. It s the same story in loans. SMEs in the early growth phase don t meet the traditional debt funding qualification criteria, a situation which is only going to get worse if and when capital requirements increase. Fifty- two per cent of businesses told us they re worried about how changes to bank capital requirements might make it even harder to get funding. So they re looking to alternative forms of loan to fund their business. This is where peer- to- peer and crowd- funded equity- raising are really going to shine. Disrupters ramp up the pressure Disruptive platforms know that conditions are right for business to turn to them in droves. The number of disruptive finance providers entering the market has doubled over the last two years. With only 11% of businesses already looking to disruptive solutions, there s definitely room to grow. The next boom in Australia could be driven by SMEs access to cash, says Sedgwick. Key findings of the report include: Two out of three businesses said lack of financing was affecting their ability to grow 52% are concerned that reforms to the banking sector are going to make it harder to get a loan 70% said long invoice payment terms were negatively affecting their cashflow The number of tech- enabled disruptive financing instruments in Australia has doubled over the past two years 11% of SMEs are turning to disruptive financing instruments

8 The embargoed report Cash Flow Issues Drive Aussie SMEs to Disruptive Solutions is available for download here. The Invoice Market Managing Director Angus Sedgwick is available for interview. For further information: Parnell McGuinness, ph , e [email protected] About The Invoice Market The Invoice Market is an online auction platform which creates an efficient marketplace for invoice factoring. The platform matches businesses requiring cash flow funding with Institutional and High Net Worth Sophisticated investors willing to provide working capital and cash flow finance. The Invoice Market launched in Australia in June 2014 and has funded over $10 million in invoices to date.

9 Finsia 16 September article/2014/09/15/are- banks- sending- smes- to- the- competition Are banks sending SMEs to the competition? by Robin Christie Sep 16, 2014 Frustrated Australian businesspeople are turning to disruptive finance solutions to find flexible loan terms, it has been claimed. According to new research from the Invoice Market, SMEs that struggle to access bank loans to solve common financing and cash flow problems are testing new offerings such as crowd sourcing. The move to disruptive financing models is a clear vote against the onerous and inflexible terms banks and other types of financing levy on SMEs, said the Invoice Market Managing Director Angus Sedgwick. The internet is creating efficient markets. This is an exciting time to be in business in Australia. He noted that 40 per cent of the survey's respondents would consider traditional debtor finance, but 60 per cent "wouldn t have access even to this type of factoring, due to requirements that their invoices be spread across a certain minimum number of clients or based on geographical limitations". These are good businesses, claimed Sedgwick, but they're being turned away from financial institutions because their risk profile is found to be too high.

10 Creative solutions What these businesses require, Sedgwick believes, are agile and creative finance options. And the internet is providing the platform for these innovative solutions to take a slice of the SME funding market. It s the same story in loans," he said. "SMEs in the early growth phase don t meet the traditional debt funding qualification criteria, a situation which is only going to get worse if and when capital requirements increase". And it would seem that SME owners are aware of the effect that any change in capital requirements could have on funding. Fifty two per cent of survey respondents stated that they were worried that it would become harder to get funding should more banking reforms come into effect. "They re looking to alternative forms of loan to fund their business. This is where peer to peer and crowd funded equity raising are really going to shine, said Sedgwick. Disruptive platforms know that conditions are right for business to turn to them in droves." Room for growth The disruptive finance market may have doubled in size in the last two years but, with survey responses suggesting that only 11 per cent of businesses are currently looking for disruptive solutions, Sedgwick said that there's definitely room for growth. "The next boom in Australia could be driven by SMEs access to cash, he said. According to the survey, ABS figures have revealed that almost 90 per cent of businesses that engage in innovative activity are small businesses. Meanwhile, these actively innovative businesses were twice as likely to seek finance as their non innovative counterparts. Other survey findings included: Two out of three respondents said lack of finance was affecting their ability to grow. 32 per cent said they would use their personal savings or equity in their family home to finance their business. Five per cent said they might be forced to close their businesses due to finance hurdles. More on digital disruption in finance With a keynote from SocietyOne CEO Matt Symons, Finsia's Annual Conference agenda tackles key questions in funding for growth and digital disruption. Click here to register.

11 Professional Planner 11 September and- paste/2014/09/11/new- research- shows- aussie- smes- are- cautiously- embracing- disruptive- finance / Recent research has found early signs that small to medium businesses are turning to disruptive solutions to solve common financing and cashflow problems. Long payment terms and difficulty accessing bank loans is driving their search for better forms of finance. Those who have not yet explored new models are feeling the credit squeeze, with 40% accessing funds through traditional forms of debtor finance and a worrying 32% saying they would be forced to use their personal savings or equity in the family home, says the study Cash Flow Issues Drive Aussie SMEs to Disruptive Solutions published by The Invoice Market. "The move to disruptive financing models is a clear vote against the onerous and inflexible terms banks and other types of financing levy on SMEs," says The Invoice Market Managing Director Angus Sedgwick, who commissioned the survey, "The internet is creating efficient markets. This is an exciting time to be in business in Australia." Business finance can be expensive, inflexible and unsuitable

12 "Just over 40% of the businesses in our survey said they'd turn to traditional debtor finance, with its flexibility compared to bank finance being the key benefit," says Sedgwick, "But there are another 60% who wouldn't have access even to this type of factoring, due to requirements that their invoices be spread across a certain minimum number of clients or based on geographical limitations. These are good businesses, but their risk profile is just too high for the institutions. Agility and creativity is key to servicing these businesses. Online models which connect businesses with investors are just one of the ways the issue is being addressed." "It's the same story in loans. SMEs in the early growth phase don't meet the traditional debt funding qualification criteria, a situation which is only going to get worse if and when capital requirements increase. Fifty- two per cent of businesses told us they're worried about how changes to bank capital requirements might make it even harder to get funding. So they're looking to alternative forms of loan to fund their business. This is where peer- to- peer and crowd- funded equity- raising are really going to shine." Disrupters ramp up the pressure "Disruptive platforms know that conditions are right for business to turn to them in droves. The number of disruptive finance providers entering the market has doubled over the last two years. With only 11% of businesses already looking to disruptive solutions, there's definitely room to grow. The next boom in Australia could be driven by SMEs access to cash," says Sedgwick. Key findings of the report include: Two out of three businesses said lack of financing was affecting their ability to grow 52% are concerned that reforms to the banking sector are going to make it harder to get a loan 70% said long invoice payment terms were negatively affecting their cashflow The number of tech- enabled disruptive financing instruments in Australia has doubled over the past two years 11% of SMEs are turning to disruptive financing instruments

13 Recommendations The report was on the whole a success and attracted coverage in many of The Invoice Market s top targets, which it could not have afforded advertising space in. The Invoice Market is launched into the Australian market and has taken its place in journalists minds as a source of commentary and contribution on alternative finance and disruptive solutions. In order to consolidate these gains, Thought Broker recommends: A program of regular outreach in the financial press to weigh into debates over alternative/disruptive finance and capitalise on these opportunities to maintain salience for The Invoice Market s offering Case study outreach to industry media to create further penetration into lucrative verticals.